How to improve your credit with student loans Worried about paying for college but lack a credit history or have a less-than-perfect score? You’re not alone and thankfully, there are reliable options tailored to your situation. This guide walks you through the top choices for private student loans when bad credit or limited credit is holding you back.
Why Credit Matters and How to Navigate It
Most private student loans require a good credit score (typically 670+). If your credit is low or nonexistent, lenders will likely ask for a cosigner someone with stronger credit who’ll share responsibility. But some newer options are now aimed directly at students like you.
🌟 Top Private Loan Options for Bad/No Credit
1. Ascent No Cosigner Loans
- Best for: Juniors, seniors, or grad students with little to no credit history
- Offers two “no-cosigner” paths: one based on credit, another outcomes-based (looks at school, major, GPA)
- APR range: ~8.25%–15.13% (variable/fixed)
- Serves many U.S. schools and reports as top no-cosigner choice
2. Edly Income-Based, No Cosigner
- Highlights: Designed for students near graduation, offering built-in income-based repayment
- Adjusts monthly payments to your earnings and includes forbearance protections
- Cosigner not required, but optional for more flexible options
3. Earnest Merit-Based Lending
Great if you: Have solid academic or professional potential
Evaluates your full profile credit, education, income, savings not just FICO score
Known for slick online tools and refinance options
More Options to Consider
MPOWER Financing: Focuses on international and DACA students without requiring a U.S. cosigner
Abe Student Loans: Simplifies the process with clear terms and no hidden fees
Credit Unions via LendKey: Local credit unions often offer lower rates and more flexible lending, even for limited-credit borrowers
✅ How to Choose and Compare These Options
APR Rates – Compare fixed vs. variable. Fixed gives stability; variable may start lower but can rise.
Cosigner Rules – Some require one, others don’t. Look for cosigner-release benefits.
Repayment Structure – Edly adjusts costs based on income; Earnest lets you customize.
Fees & Transparency – Prefer loans with no origination or late fees (e.g., Abe is fee-free)
School Compatibility – Check if your school is eligible Ascent and Edly support many, but always confirm.
Customer Experience – Tools like Credible compare lenders easily compare ease of prequalification and support
🧭 Making the Best Choice With a Bad Credit Profile
Start with federal aid: Always file FAFSA first—federal loans often come with better borrower protections.
Prequalify indoors: Tools like Credible let you check rates without impacting your score
Use a cosigner if needed: A parent or guardian with good credit can unlock better loan options
Read the fine print: Understand grace periods, repayment schedules, and whether refinancing is allowed later
📊 Quick Overview Table
| Lender | Cosigner? | APR Range | Unique Feature |
|---|---|---|---|
| Ascent | No (optional) | 8.25%–15.13% | Outcomes-based approval |
| Edly | No | Varies | Income-based repayment |
| Earnest | Opt./Maybe | Varies | Merit-based, refinancing available |
| MPOWER | No | Varies | International/DACA focus |
| Abe | Opt./Maybe | Varies | Fee-free, simple process |
| LendKey | Opt./Maybe | Varies | Credit union access |
👣 What to Do Next
Borrow only what you need—use a loan calculator to estimate payments
Check your FAFSA — federal aid comes first
Prequalify with 2–3 lenders to compare
Gather documents: school details, ID, bank statements
Choose the loan that fits your timeline and repayment plan